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    Data#3 (ASX:DTL) Shares Face AI Spend Risk After Profit Gain

    Simply Wall St·08/25/2026 10:15:58
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    Data#3 walked into this result on a strong run, with the stock up about 34% over the past three months and trading on a rich P/E of 33.4x. That sets a high bar. The headline from these numbers is simple: earnings from continuing operations reached A$54.5m on trailing twelve month revenue of A$907.3m, and management is leaning into heavier AI and security investment that could tug on near term profit.

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    FY 2026 Earnings Summary

    • Revenue (FY 2026 vs FY 2025 TTM): A$907.3m vs. A$853.0m (up about 6.4%)
    • Net Income from Continuing Operations (FY 2026 TTM vs FY 2025 TTM): A$54.5m vs. A$48.2m (up about 13.1%)
    • Basic EPS (Earnings Per Share) (FY 2026 TTM vs FY 2025 TTM): A$0.3516 vs. A$0.3112 (up about 13.0%)
    • Net Margin (FY 2026 TTM vs prior year TTM): 6.0% vs. 5.6% (slight margin improvement)

    Prefer clear visuals instead of another dense wall of earnings tables and ratios? Get a full picture of Data#3 with an easy-to-scan view of its valuation profile through our company report for Data#3.

    ASX:DTL Trailing 12-Month Earnings & Revenue History as at Aug 2026
    ASX:DTL Trailing 12-Month Earnings & Revenue History as at Aug 2026

    Data#3 earnings lean toward the bullish view

    For investors leaning optimistic on Data#3, the latest numbers broadly back the idea of a resilient, cash generative IT partner. Gross sales and net profit before tax both rose double digit. Recurring gross sales now sit at 70%, which fits the picture of steadier revenue tied to long contracts in cloud, security and managed services. Operating leverage is working, with internal cost ratio improving and EBITDA growing faster than gross profit. A strong balance sheet with A$326m cash and no borrowings gives clear capacity to keep investing in AI and security without stressing finances.

    Investment cycle keeps bearish questions alive

    The cautious view on Data#3 still has some support. Management is upfront that heavier AI and security spend could drag up to about A$2m on FY27 net profit, and staff costs may rise close to 10%. Services growth was mixed, with project and people focused work weaker even as consulting and managed services improved. Cash from operations fell to A$23.3m due to working capital timing, while inventory lifted to A$73.4m as hardware was pre bought. These shifts show execution and margin risk, even though they are backed by committed customer orders and a strong cash position.

    Compare Data#3's stronger cash generation, higher recurring revenue mix and heavier AI and security investment with how the market is already pricing ASX:DTL at A$11.73 after this result, and consider whether analysts see more upside or think expectations are running hot. See the consensus price target analysis for Data#3

    Take Control Of Your Data#3 Research

    If the recent earnings momentum and richer P/E on Data#3 have your attention, register for free with Simply Wall St and add it to a Watchlist to track share price moves against fair value estimates and wait for a setup that fits your plan. After you own the stock, use the Portfolio Command Center to cut through market noise and only surface the most important news and fundamental changes across your holdings. For a longer term view, tap into crowd insights and sentiment through the Community so you can see how other investors are thinking about AI investment, margins and cash flow risk. By spotting hidden catalysts and potential red flags early, you give yourself a better shot at staying ahead of the market rather than reacting to it late.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.